Ottawa, ON, September 15, 2014 - The Canadian Real Estate Association (CREA) has updated its forecast for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards and Associations for 2014 and 2015.

The deferral of sales and listings during an extraordinarily bleak winter delayed the start to the spring home buying season earlier this year. This deferral boosted activity in May and June as properties were snapped up after finally hitting the market, particularly in markets with a shortage of listings.

Although this boost was and still is expected to be transitory, sales have yet to show signs of cooling as activity strengthened slightly further over the summer. The increase reflects continuing strength in home sales among large urban markets that initially drove the spring rebound together with gains in markets where activity had previously struggled to gain traction. Lowered mortgage interest rates supported this trend.

Sales are now forecast to reach 475,000 units in 2014, representing an increase of 3.8 per cent compared to 2013. This is upwardly revised from CREA’s forecast of 463,400 sales published in June, and reflects stronger than expected sales in recent months. Even so, sales activity is expected to peak in the third quarter as the impact of a deferred spring dissipates and continuing home price increases erode housing affordability.

This would place activity in 2014 slightly above but still broadly in line with its 10-year average. Despite periods of monthly volatility since the recession of 2008-09, annual activity has remained stable within a fairly narrow range around its 10-year average. This stability contrasts sharply to the rapid growth in sales in the early 2000s prior to the recession.

British Columbia is forecast to post the largest year-over-year increase in activity (11.9 per cent) followed closely by Alberta (7.7 per cent). Demand in both of these provinces is currently running at multi-year highs.

Activity in Saskatchewan, Manitoba, Ontario, Quebec and New Brunswick is expected to come in roughly in line with 2013 levels, with sales increases ranging between one and two per cent in the first three provinces and edging lower by about one per cent lower sales in the latter two provinces. Sales in Nova Scotia and in Newfoundland and Labrador are projected to be down this year by 3.9 per cent and 5.2 per cent respectively.

Mortgage interest rates are expected to edge higher as Canadian exports, business investment, job growth, and incomes improve. These opposing factors should benefit housing markets where demand has been softer but prices have remained more affordable. Sales in relatively less affordable housing markets are likely to be more sensitive to higher fixed mortgage rates.

National activity is now forecast to reach 473,100 units in 2015, representing a decline of four tenths of one per cent. Sales activity is forecast to grow fastest in Nova Scotia (+3.3 per cent), followed by Quebec (+1.3 per cent) and New Brunswick (+1.3 per cent). Alberta is the only other province forecast to post higher sales next year (+1.0 per cent).

In other provinces, activity is forecast to decline in the range of between one and two per cent. In British Columbia and Ontario, this trend reflects eroding affordability for single family homes.

The national average price has evolved largely as expected since the spring, resulting in little change to CREA’s previous forecast.

The national average home price is now projected to rise by 5.9 per cent to $405,000 in 2014, with similar price gains in British Columbia, Alberta, and Ontario. Increases of just below three per cent are forecast for Saskatchewan, Manitoba and Prince Edward Island. Newfoundland and Labrador is forecast to see average home price rise by about one per cent this year, while Quebec is forecast to see an increase half that size.

Prices are forecast to be flat in New Brunswick and recede by almost two per cent and Nova Scotia.

The national average price is forecast to edge up a further 0.7 per cent in 2015 to $407,900. Alberta and Manitoba are forecast to post average price gains of almost two per cent in 2015, followed closely by Ontario at 1.3 per cent. Average prices in other provinces are forecast to remain stable, edging up by less than one percentage point.

Buyer profile shows 96% of houses in the region purchased for principal residence

The Vancouver Island homebuyer gets good value and relative price stability, compared to his counterpart in the Lower Mainland or Victoria, according to the Vancouver Island Real Estate Board's 2011 Buyer Profile, which provides a snapshot of what buyers were looking for last year

The profile is an annual survey used to paint a picture of real estate sales activity and market trends in the VIREB coverage area, which extends from the Malahat to the northern tip of Vancouver Island.

The typical home sold last year had three bedrooms, two bathrooms and listed for $350,000. It's considerably less than a comparable home in either Vancouver or Victoria.

Many buyers are attracted to Nanaimo by the climate, location and housing affordability, compared to other coastal cities.

The survey is based on voluntary submissions from respondents. Of 6,034 surveys sent out, 1,587, or 26.3%, were filled out and returned.

The average selling price closely reflects the Nanaimo market, where $358,00 was the average selling price in June, compared to $198,000 in Port Alberni, or about $400,000 in Parksville.

The buyer profile paints a picture of market stability since 96% of homes sold last year were bought by buyers interested in buying for a principal residence.

Just 17% of those purchasers were first-time buyers.

And 42% of homes were for retirement properties. Only 13% of buyers used RRSPs for a down payment.

The VIREB region is "not as volatile" as the Lower Mainland, said Darrell Paysen, VIREB member services manager.

No matter where buyers come from, they come to this region for affordable prices, compared to the Lower Mainland or the provincial capital.

The Buyer Profile identifies the Vancouver Island buyer as typically mature and often a retiree.

"Vancouver Island is clearly both an economic engine and a retirement village," said Cameron Muir, chief economist of the British Columbia Real Estate Association, in a press release.

"The survey confirms that little speculation is occurring in the Vancouver Island housing market with just 3% of home sales to investors."

Two out of five Island home-buyers buy a retirement home and nearly 40% come from off the Island.

The profile can be used as a resource to learn more about specific market areas in the region.

"It's just a compilation of a whole bunch of information that makes you scratch your head and say: 'Wow,'" said Jim Stewart, VIREB past president.

Homebuying activity strong out of the gate,as a more competitive market takes shape for spring 2012, says RE/MAX

Major Canadian real estate markets continued to show exceptional resiliency throughout the first quarter of the year, with strong demand and diminished supply setting the stage for a heated spring 2012, according to a report released today by RE/MAX.

The RE/MAX Market Trends Report, highlighting sales, price, trends and developments in 15 markets across the country, found that 12 of 15 Canadian centres (80 per cent) were reporting year-to-date (January-February) sales activity ahead of last year’s levels, with more than half reporting double-digit increases. Low interest rates, coupled with strong consumer confidence levels and a mild winter, played a significant role in the upswing, ushering in an early start to the spring market. Average price climbed in 14 of 15 markets (93 per cent) examined, yet appreciation was more tempered, with only three markets posting gains in excess of 10 per cent. Tighter inventory levels at entry-level price points have sparked bidding wars—particularly in Winnipeg and the Greater Toronto Area—with similar conditions starting to emerge in Saskatoon, Regina, London-St. Thomas, Hamilton-Burlington, Ottawa, St. John’s, and Halifax-Dartmouth.

“Housing values are escalating at a steady pace in most major markets,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “Yet, gains are, as predicted, much more moderate than in years past. We expect this will remain the trend moving forward—in line with the Canadian economy, as GDP growth also moves ahead at a more subdued pace. Conditions will vary locally, with some markets exceeding expectations, largely due to the fact that the significant influx of inventory expected never materialized or, in the case of Saskatchewan and Newfoundland, the local economy has shown extraordinary strength. On the whole, this is a very stable and healthy housing market in line with traditional norms, with few exceptions.”

In terms of sales appreciation, the best performing markets heading into the traditionally busy spring season were Halifax-Dartmouth (35 per cent), Saskatoon (21 per cent), Saint John (20 per cent), Regina (16 per cent), St. John’s (12.5 per cent), Greater Toronto Area (12 per cent), London-St. Thomas (11 per cent), and Edmonton (11 per cent). Only Vancouver, Kitchener-Waterloo, and Winnipeg have experienced softening in housing activity so far this year. Sales are down 16 per cent in the Greater Vancouver, 4.5 per cent in Kitchener-Waterloo, and almost on par in Winnipeg.

“Given the current economic climate, the strength of the country’s housing market clearly reflects the value Canadians place on homeownership,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. “One driving factor has been the overall performance of the market over the past decade. Existing homeowners have realized substantial equity gains, especially in recent years, and many are taking advantage of the combination of historically low interest rates and equity to upgrade. Perhaps more importantly, housing has outperformed just about every other asset class – and a principle residence is capital gains exempt – a fact that’s not gone unnoticed.”

Year-to-date average price in most major centres is also on the upswing. Winnipeg, Greater Toronto and St. John’s each posted a percentage increase of 10 per cent in the first two months of 2012. Values in Kitchener-Waterloo followed at nine per cent, while Regina and Saskatoon escalated six per cent.

Purchasing intentions have largely been driven by confidence in a buyer’s own employment and financial picture, followed by major lifecycle events. While global uncertainties caused some to pause in recent years, purchasers will only sit on the fence so long before the need to make a move becomes a stronger impetus. That reality is starting to fuel momentum, along with the domino effect of an enthusiastic entry-level segment. First-time buyers are driving demand in both the smaller and major markets, in turn sparking strong sales activity among move-up purchasers at the higher price points. As a result, the upper-end of the market has also held up well. There’s no question that the spring 2012 market will see all segments working in tandem.

Highlights:

• Halifax-Dartmouth’s residential real estate market is firing on all cylinders thanks to the $25 billion shipbuilding contract awarded in the last quarter of 2011. Renewed confidence has bolstered homebuying activity, with sales up 35 per cent over one year ago.

• Markets in Saskatchewan are also red-hot, with Saskatoon (21 per cent) and Regina (16 per cent) supported by strong economic fundamentals and increasing population levels in the province.

• Tight market conditions have seriously hampered sales activity in Winnipeg, but purchasers remain undaunted. In February, 44 per cent of single-family homes sales sold above list price, while 31 per cent of condominium sales sold for more than ask.

• In Greater Toronto, multiple offers are commonplace in blue-chip neighbourhoods, with an estimated 50 per cent of detached homes priced in the $600,000 to $900,000 price range selling for more than list price.

• The First-Time Buyer’s Tax Credit and remediation of the Harmonized Sales Tax (HST) issue in British Columbia is expected to breathe new life into housing markets this spring.

RE/MAX is Canada’s leading real estate organization with over 18,700 sales associates situated throughout its more than 720 independently-owned and operated offices in Canada. The RE/MAX network, now in its 38th year, is a global real estate system operating in 87 countries, with over 6,200 independently-owned offices and over 87,000 member sales associates. RE/MAX realtors lead the industry in professional designations, experience and production while providing real estate services in residential, commercial, referral, and asset management. For more information, visit: www.remax.ca .